Pulmonary hypoplasia is a devastating complication of preterm delivery that is responsible for over 70% of the cases of perinatal mortality. Replacement of damaged cells with healthy cells that would participate in physiological processes and respond to local signaling cues is a therapeutic ideal that may be achievable using stem cell-based therapy. Embryonic stem (ES) cells show tremendous promise as a source of healthy cells. Indeed, we have shown that murine ES cells can be differentiated into specialized surfactant-producing alveolar type II pneumocytes that distribute in the lung parenchyma when implanted into preterm mice. However, the fundamental obstacle of immune rejection precludes long-term engraftment of these cells and impedes translation to clinical therapy. Clearly, new methods to alter the host's detection of the graft or induce graft tolerance are critical to advance of this potentially transformative therapeutic option. We have a longstanding interest in CD13, a multifunctional cell surface peptidase expressed on many cell types where it influences cell adhesion, migration, antigen presentation and endocytosis. Pertinent to this proposal, CD13 is also found on adult and embryonic stem cells. During the course of characterizing CD13KO mES cells, we observed that while cells of both genotypes grew equally well when subcutaneously injected as teratomas into immune-compromised mice, CD13KO ES showed markedly enhanced growth and differentiation in immune competent animals. These CD13KO teratomas contained fewer immune cells, suggesting that the absence of CD13 on the ES cells allowed the transplanted cells to evade immune detection. To confirm this notion, we performed skin transplants between gender-mismatched WT and CD13KO animals. Remarkably, the CD13KO grafts survived for greater than 100 days in both WT and CD13KO hosts while WT grafts were readily rejected, supporting our observations in the teratoma model. Furthermore, at 7d post-transplant the architecture of the skin in WT grafts was clearly disrupted with numerous graft-infiltrating immune cells, while the CD13KO grafts retained a more normal architecture with fewer infiltrating cells. While the hematopoietic profiles of nav CD13KO mice are normal, 18 there are fewer infiltrating T cell, macrophage populations and significantly reduced numbers of degranulated mast cells in gender-mismatched CD13KO grafts when compared to WT, consistent with WT grafts triggering a stronger immune response? Importantly, treatment of WT mice with a blocking anti-CD13 monoclonal antibody significantly enhanced the survival of mismatched WT grafts when compared to vehicle alone and treatment withdrawal led to graft rejection, implying that CD13 influences immune detection rather than tolerance induction. Taken together, our studies identify CD13 as a potential target for modulation of transplant immunity. We hypothesize that the absence of CD13 in donor cells allows them to escape immune detection and subsequent rejection, thus prolonging survival.